Fitch Places One IDR, Debt Ratings of 26 APAC Banks Under Criteria Observation
04 MAR 2020 06:49 AM ET
Fitch Ratings - Sydney/Hong Kong/Taipei/Singapore/Bangkok/Seoul/Tokyo - 04 March 2020:
Fitch Ratings has placed one Issuer Default Rating (IDR) and various international scale debt ratings of 26 APAC banks under criteria observation (UCO).
A full list of the banks is available at the end of this commentary.
The UCO placements follow the publication on 28 February 2020 of the updated Bank Rating Criteria, which included changes to the way Fitch rates operating company subsidiaries (OpCos) of banking groups headed by bank holding companies (BHCs) and to the way Fitch notches senior and junior debt ratings from their IDR or Viability Rating (VR) anchors.
The updated criteria better reflects continuing developments in bank resolution, notably developments in bank resolution plans, the build-up of bail-in debt buffers that protect more senior creditors and their implication for default risk and recovery prospects for different senior and junior liability classes and for bank and non-bank financial institution operating companies relative to BHCs. Fitch has also reduced the base-case notching for non-performance on additional Tier 1 (AT1) instruments, narrowing the relative gap between Tier 2 and AT1 instruments where Fitch has reappraised its baseline treatment of non-performance risk.
Ratings designated as being UCO will be reviewed and resolved as soon as practical and in any case within six months.
RATING ACTIONS ENTITY/DEBT RATING PRIOR
HIDE RATING ACTIONS
Hang Seng Bank Limited LT IDR A+ A+ Under Criteria Observation
DBS Bank Ltd.
preferred LT BBB BBB Under Criteria Observation
DBS Group Holdings Ltd.
senior unsecured LT AA- AA- Under Criteria Observation
subordinated LT A+ A+ Under Criteria Observation
preferred LT BBB BBB Under Criteria Observation
Oversea-Chinese Banking Corporation Limited
subordinated LT A+ A+ Under Criteria Observation
preferred LT BBB BBB Under Criteria Observation
United Overseas Bank Limited
subordinated LT A+ A+ Under Criteria Observation RATING ACTIONS
ENTITY/DEBT RATING PRIOR
preferred LT BBB BBB Under Criteria Observation
Westpac Banking Corporation
subordinated LT A+ A+ Under Criteria Observation
junior subordinated LT BBB BBB Under Criteria Observation
Australia and New Zealand Banking Group Limited
subordinated LT A+ A+ Under Criteria Observation
junior subordinated LT BBB BBB Under Criteria Observation
National Australia Bank Limited
subordinated LT A+ A+ Under Criteria Observation
Commonwealth Bank of Australia
subordinated LT A+ A+ Under Criteria Observation
Macquarie Bank Limited
subordinated LT A- A- RATING ACTIONS
ENTITY/DEBT RATING PRIOR
Under Criteria Observation
Industrial and Commercial Bank of China (Macau) Limited
subordinated LT A- A- Under Criteria Observation
CTBC Bank Co., Ltd.
subordinated LT A- A- Under Criteria Observation
MUFG Bank, Ltd.
subordinated LT A- A- Under Criteria Observation
Bendigo and Adelaide Bank Limited
subordinated LT BBB+ BBB+ Under Criteria Observation
Bank of Queensland Limited
subordinated LT BBB+ BBB+ Under Criteria Observation
Shanghai Commercial Bank Limited
subordinated LT BBB+ BBB+ Under Criteria Observation
Woori Bank RATING ACTIONS
ENTITY/DEBT RATING PRIOR
subordinated LT BBB+ BBB+ Under Criteria Observation
KASIKORNBANK Public Company Limited
subordinated LT BBB BBB Under Criteria Observation
Auswide Bank Ltd
subordinated LT BBB BBB Under Criteria Observation
Heritage Bank Limited
subordinated LT BBB BBB Under Criteria Observation
Bangkok Bank Public Company Limited
subordinated LT BBB BBB Under Criteria Observation
China CITIC Bank International Limited
subordinated LT BBB BBB Under Criteria Observation
Dah Sing Bank, Limited
subordinated LT BBB BBB RATING ACTIONS
ENTITY/DEBT RATING PRIOR
Under Criteria Observation
Southland Building Society
subordinated LT BBB- BBB- Under Criteria Observation
Chong Hing Bank Limited
subordinated LT BBB- BBB- Under Criteria Observation
The Co-operative Bank Limited
subordinated LT BBB- BBB- Under Criteria Observation
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Fitch has placed one IDR, and the senior debt, subordinated debt and hybrid debt ratings of the 26 issuers on UCO. This reflects the possibility that these ratings will be upgraded or downgraded as a result of the publication of our new Bank Rating Criteria on 28 February 2020, as outlined in more detail in the Rating Sensitivities section of this rating action commentary.
LONG-TERM IDR
The Long-Term IDR of Hang Seng Bank Limited is driven by its VR and reflects Fitch's assessment that the bank's intrinsic profile is sufficiently strong and balanced to weather further deterioration in Hong Kong's economy without meaningful impairment of key financial metrics.
SENIOR UNSECURED DEBT Senior unsecured debt ratings of DBS Group Holdings Ltd. are equalised with its IDR.
SUBORDINATED (TIER 2) DEBT
Subordinated debt ratings of all banks are notched down once from their respective anchor rating to reflect Fitch's expectation of below-average recoveries. In each case the anchor rating is their VR, except for Industrial and Commercial Bank of China (Macau) Limited (institutional support-driven IDR) and Woori Bank (sovereign support-driven IDR).
HYBRID (TIER 1) DEBT
The ratings of hybrid debts with fully flexible coupons, mostly AT1 debt, are notched down five times from their respective VR (two notches for loss severity and three for incremental non-performance risk).
RATING SENSITIVITIES
LONG-TERM IDR
The Long-Term IDR of Hang Seng Bank Limited is placed on UCO, as it is a material subsidiary within the Asian resolution group of its ultimate BHC (HSBC Holdings plc, A+/Stable/a+). Its IDR could be upgraded under the new criteria if Fitch concludes that external senior creditors are likely to benefit from resolution funds ultimately raised by the BHC and designed to protect its senior creditors in a group failure scenario.
SENIOR UNSECURED DEBT
We have placed the senior unsecured debt rating of DBS Group Holdings Ltd. on UCO because it is issued by a holding company and the rating could be downgraded under the new criteria to reflect below average recovery prospects if buffers of junior debt are likely to be thin, unless conditions under the new criteria for no notching prevail.
SUBORDINATED (TIER 2) DEBT
We have placed the subordinated (Tier 2) debt ratings of the following issuers on UCO because they could be downgraded to reflect the switch to a baseline notching of two notches for loss severity from the anchor rating under the new criteria (from one notch under previous criteria) unless conditions under the new criteria for one notch prevail.
Australia and New Zealand Banking Group Limited
Auswide Bank Ltd
Bangkok Bank Public Company Limited
Bank of Queensland Limited
Bendigo and Adelaide Bank Limited
China CITIC Bank International Limited
Chong Hing Bank Limited
Commonwealth Bank of Australia
CTBC Bank Co., Ltd.
Dah Sing Bank, Limited
DBS Group Holdings Ltd.
Heritage Bank Limited
Industrial and Commercial Bank of China (Macau) Limited
KASIKORNBANK Public Company Limited
Macquarie Bank Limited
MUFG Bank, Ltd.
National Australia Bank Limited
Oversea-Chinese Banking Corporation Limited
Shanghai Commercial Bank Limited
Southland Building Society
The Co-operative Bank Limited
United Overseas Bank Limited
Westpac Banking Corporation
Woori Bank HYBRID (TIER 1) DEBT
We have placed the ratings of Tier 1 debt with fully flexible coupons of the following issuers on UCO. These bonds could be upgraded to be notched four times from the anchor ratings under the new criteria to reflect a reduction in incremental non-performance risk notching, unless conditions under the new criteria for wider notching prevail.
Australia and New Zealand Banking Group Limited
DBS Bank Ltd.
DBS Group Holdings Ltd.
Oversea-Chinese Banking Corporation Limited
United Overseas Bank Limited
Westpac Banking Corporation
Additional information is available on www.fitchratings.com
APPLICABLE CRITERIA
Bank Rating Criteria (pub. 28 Feb 2020)
ADDITIONAL DISCLOSURES
Solicitation Status Endorsement Policy
DISCLAIMER
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRA TINGS. IN ADDITION, THE FOLLOWING https://www.fitchratings.com/site/dam/jcr:6b03c4cd-611d-47ec-b8f1-183c01b5 1b08/Rating%20Definitions%20-%203%20May%202019%20v3%206-11-19.p df DETAILS FITCH'S RATING DEFINITIONS FOR EACH RATING SCALE AND RATING CATEGORIES, INCLUDING DEFINITIONS RELATING TO DEFAULT. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS://WWW.FITCHRATINGS.COM/SITE/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. SHOW FULL TEXT
COPYRIGHT
Copyright © 2020 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch's ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001 Fitch Ratings, Inc. is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (the "NRSRO"). While certain of the NRSRO's credit rating subsidiaries are listed on Item 3 of Form NRSRO and as such are authorized to issue credit ratings on behalf of the NRSRO (see https://www.fitchratings.com/site/regulatory), other credit rating subsidiaries are not listed on Form NRSRO (the "non-NRSROs") and therefore credit ratings issued by those subsidiaries are not issued on behalf of the NRSRO. However, non-NRSRO personnel may participate in determining credit ratings issued by or on behalf of the NRSRO. SHOW FULL TEXT SOLICITATION STATUS
The ratings above were solicited and assigned or maintained at the request of the rated entity/issuer or a related third party. Any exceptions follow below.
UNSOLICITED ISSUERS
ISIN/CUSIP/COUPON SOLICITATION ENTITY/SECURITY RATE RATING TYPE STATUS UNSOLICITED ISSUERS
ISIN/CUSIP/COUPON SOLICITATION ENTITY/SECURITY RATE RATING TYPE STATUS
Hang Seng Bank Limited - Long Term Issuer Unsolicited Default Rating
CTBC Bank Co., Ltd. TWD 2 bln 3.49% TW000G114391 Long Term Rating Unsolicited Subordinated Notes 10 Apr 2023
MUFG Bank, Ltd. JPY 20 bln 2.01% JP358920B571 Long Term Rating Unsolicited Subordinated Notes 22 Jul 2020
ENDORSEMENT POLICYFitch's approach to ratings endorsement so that ratings produced outside the EU may be used by regulated entities within the EU for regulatory purposes, pursuant to the terms of the EU Regulation with respect to credit rating agencies, can be found on the EU Regulatory Disclosures page. The endorsement status of all International ratings is provided within the entity summary page for each rated entity and in the transaction detail pages for all structured finance transactions on the Fitch website. These disclosures are updated on a daily basis.
ISSUERS VIEW ALL ISSUER CONTENT
中國信託商業銀行信用評等摘要
China CITIC Bank International Limited
適時開示情報 株式会社三菱 UFJ 銀行 アジア太平洋地域の 26 件の銀行の IDR 及び債券格付を「格付基準変更 に伴う見直し」に指定
CTBC Bank Co., Ltd. VIEW ALL SECTOR CONTENT
Mortgage Market Index - Australia: The Dinkum RMBS Index - 4Q19 (Excel)
Mortgage Market Index - Australia: The Dinkum RMBS Index - 4Q19
Fitch Ratings: Australian Mortgage Arrears Stable in 4Q19; Minimal Impact from Bushfires, COVID-19
PT Bank CIMB Niaga Tbk 中國信託商業銀行信用評等摘要
VIEW ALL
FITCH RATINGS ANALYSTS Primary Rating Analyst Jack Do Director +61 2 8256 0355 Fitch Australia Pty Ltd Level 15 77 King Street Sydney NSW 2000
Primary Rating Analyst George Hong Director +61 2 8256 0345 Fitch Australia Pty Ltd Level 15 77 King Street Sydney NSW 2000
Primary Rating Analyst Tania Gold Senior Director +65 6796 7224 Fitch Ratings Singapore Pte Ltd. One Raffles Quay #22-11, South Tower Singapore 048583
Primary Rating Analyst Jindarat Sirisithichote Associate Director +66 2 108 0153 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini Bangkok 10330
Primary Rating Analyst Savio Fan Associate Director +852 2263 9955 Fitch (Hong Kong) Limited 19/F Man Yee Building 60-68 Des Voeux Road Central Hong Kong
Primary Rating Analyst Tim Roche Senior Director +61 2 8256 0310 Fitch Australia Pty Ltd Level 15 77 King Street Sydney NSW 2000
Primary Rating Analyst Sophia Chen Director +886 2 8175 7604 Fitch Australia Pty Ltd, Taiwan Branch Level 37 TAIPEI NANSHAN PLAZA, No. 100, Songren Road, Xinyi District Taipei 110
Primary Rating Analyst Thanasit Utamaphethai Associate Director +66 2 108 0154 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini Bangkok 10330
Primary Rating Analyst Kaori Nishizawa Director +81 3 3288 2783 Fitch Ratings Japan Limited Kojimachi Crystal City East Wing 3rd Floor 4-8 Kojimachi, Chiyoda-ku Tokyo 102-0083
Primary Rating Analyst Franco Lam Director +852 2263 9969 Fitch (Hong Kong) Limited 19/F Man Yee Building 60-68 Des Voeux Road Central Hong Kong
Primary Rating Analyst Heakyu Chang Senior Director +822 3278 8363 Fitch Australia Pty Ltd, Korea Branch 9F Kyobo Securities Building 97 Uisadang-daero, Youngdeungpo-gu Seoul 07327
Secondary Rating Analyst Tim Roche Senior Director +61 2 8256 0310
Secondary Rating Analyst Jack Do Director +61 2 8256 0355
Secondary Rating Analyst Patchara Sarayudh Director +66 2 108 0152
Secondary Rating Analyst Jindarat Sirisithichote Associate Director +66 2 108 0153
Secondary Rating Analyst George Hong Director +61 2 8256 0345
Secondary Rating Analyst Franco Lam Director +852 2263 9969
Secondary Rating Analyst Cherry Huang Director +886 2 8175 7603
Secondary Rating Analyst Priscilla Tjitra Associate Director +65 6796 7238
Secondary Rating Analyst Thanasit Utamaphethai Associate Director +66 2 108 0154
Secondary Rating Analyst Yuka Negami Director +81 3 3288 2686
Secondary Rating Analyst Savio Fan Associate Director +852 2263 9955
Secondary Rating Analyst Matt Choi Director +822 3278 8372
Committee Chairperson Jonathan Cornish Managing Director +852 2263 9901
MEDIA CONTACTS Alanis Ko Hong Kong +852 2263 9953 [email protected]
Leslie Tan Singapore +65 6796 7234 [email protected]
Peter Hoflich Singapore +65 6796 7229 [email protected]
Wai Lun Wan Hong Kong +852 2263 9935 [email protected]